Monthly Viewpoint: August 2026
Our current view on investments and the economy
August 2026
Big Thought
At any given time, there are many factors impacting markets. Typically, each is viewed as being entirely negative or positive. We prefer a somewhat alternative view of these factors — call it looking for the silver linings. In recent weeks the extreme momentum of AI-related stocks has ended, and those stocks have been hit hard. That has been painful for investors in those names and a headwind for the broader market-cap-weighted stock indices. However, it has also pushed investors into other areas offering attractive value. That rotation has pushed the equal-weight S&P 500 to a recent high. The sharp rise in interest rates has also been a negative for stocks: higher rates mean greater competition for each new dollar invested and make borrowing money more expensive. However, higher rates also mean bond yields have become much more attractive for those nearing retirement or simply wanting a larger portion of their assets invested in something less volatile. TIPS in particular now offer inflation-protected yields better than in years. It's easy to see the positives when stocks are going straight up, as they have for much of the time. But when volatility occurs, it can help to consider the silver linings it provides.
Chart of the Month
Many consider the 2-year U.S. Treasury yield to be a good indicator of where the Fed funds rate is headed, or at least where it should be headed. In 2021, the Fed was slow to react to inflation and ultimately had to chase yields higher. The risk of this happening again is increasing as yields from 2 to 30 years move notably higher while the Fed stays put. New Chairman Warsh has said he wants to provide less guidance, but in a short time he's confused investors about whether he thinks rates should be lower or higher. The market will likely give him the answer — the question is how long until he admits it.
Greg Towner, CFA, CMT
Chief Investment Officer
Mr. Towner has worked in the investment industry since 1999 and received his MBA from the University of Central Florida and BA from the University of Mount Union. At Parallel he oversees the implementation of the firm's overall investment philosophy and is the Senior Portfolio Manager for several strategies. Prior to his current role Mr. Towner was comanager of large cap core and equity income portfolios totaling approximately $1 billion at Sterling Capital Management. He holds the designations of Chartered Financial Analyst and a Chartered Market Technician.
Brian Boughner, CFA, CMT
Principal
Mr. Boughner has worked in the investment industry since 2000 and holds a BS from Florida State University. He is a cofounder of Parallel, a Senior Portfolio Manager for several strategies and has developed the firm's quantitative tools. Prior to Parallel he had extensive experience with U.S. Trust, BB&T Wealth, Royal Bank of Canada (RBC Centura), Amsouth Bank, and Charles Schwab Co. Mr. Boughner holds the designations of Chartered Financial Analyst and Chartered Market Technician.
The information provided in this presentation should not be considered a recommendation to purchase or sell any particular security. Parallel Financial reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. It should not be assumed that any of the securities transactions, holdings or sectors discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable. Investing involves the risk of loss of principal. There is no assurance that any securities, sectors or industries discussed herein will be included in all portfolios invested in the strategy. Clients have the ability to impose reasonable restrictions on the management of their account. You should contact Parallel Financial should your investment objective, time horizon or general financial situation change, or if you would like to have a meeting to discuss your account. Past performance is no guarantee of future results. The S&P 500 Index is unmanaged and it is comprised of primarily large capitalization stocks. Parallel Financial Partners is a member of Fiduciary Alliance, LLC. Fiduciary Alliance, LLC is a registered investment adviser. More information about the firm can be found in its Form ADV Part 2, which is available upon request by calling 864-385-7999 or emailing info@parallelfinancial.com.
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